The keyword SEO difficulty or keyword competition is a major keyword metric when doing a keyword research. The higher the value, the harder is to compete with others on the market using that keyword. It's a critical metric alongside with exact monthly search volumes and SERP analysis.
Keyword Difficulty is a metric which tell you how hard is to rank the particular term. It is calculated by number of pages are currently ranking for that particular term, how many people are bidding on the term in paid search, how expensive are the clicks and how many people are actually searching for the term online.